Now that the wavering Elon Musk has come back to the Twitter table, announcing this week — once again — that he intends to purchase the company for $44 billion, a couple of his funders have pulled a Musk and walked away.
Although he's forking over $32 billion of his own cash, which he obtained by selling Tesla stock, he's also relying on loans from banks like Morgan Stanley and Bank of America, as well as private equity investors, to help foot the bill, according to Rolling Stone, and two of said investors are no longer interested.
Apollo Global Management Inc (APO.N) and Sixth Street Partners, which had been looking to provide financing for Elon Musk's proposed $44 billion buyout of Twitter Inc (TWTR.N), are no longer in talks with the billionaire entrepreneur, said two sources familiar with the matter.
Apollo had been in talks to provide preferred equity financing for the deal, alongside Sixth Street, sources previously told Reuters. Apollo, Sixth Street and other investors were looking to commit more than $1 billion in financing for the deal at the time. …
These talks ended months ago around the time Musk started having second thoughts about the deal, the sources cited above said. Musk initially proposed the buyout in April before backtracking in July and then changing course again this week.
And from Rolling Stone:
Ahead of his trial in the Delaware Court of Chancery, where Twitter was suing him to make the purchase after he tried to back out of it, Musk had lots of his private messages with mega-rich colleagues aired in legal discovery. Those texts saw him encouraging Oracle CEO Larry Ellison to dump $2 billion into the deal, and some discussions about the head of cryptocurrency exchange FTX Sam Bankman-Fried potentially shelling out as much as $15 billion.
It's possible the collapse of the Apollo and Sixth Street negotiations will send Musk back to Silicon Valley friends for their copious pocket change.
In the meantime, he's putting a positive spin on the deal, claiming that it's a step on the path to creating "X" or "X.com," which he has called "the everything app."
If Musk is sincere this time around, shaking an extra $1 billion out of his own piggy bank will be a lot easier than finding investors who can trust him.